KNOWING HOW TO GIVE, KNOWING HOW TO RECEIVE
IN RECENT YEARS SEVERAL STUDIES HAVE BEEN CONDUCTED THAT attempt to increase our understanding of the mental processes we undergo when we give altruistically without receiving any compensation in return. One of the most interesting studies in this field was conducted by two friends of mine, Uri Gneezy and Aldo Rustichini.1
Gneezy and Rustichini set out to test the commonly accepted economic assumption that material incentives always increase people’s motivations to undertake tasks; a slightly weaker form of this assumption postulates that incentives can never reduce motivations. To do this they conducted a field experiment. Field experiments differ from laboratory experiments in that they are conducted in the normal environments in which subjects interact in their daily lives. In many cases, the subjects are not even told that they are participating in an experiment. The advantage of field experiments is that their results are generally considered more conclusive than laboratory experiments. On the other hand, in field experiments the experimenter usually has much less control over the environment in which the subjects are located than in laboratory experiments. In many cases the experimenter may know nothing about some of the individuals related to that environment. I’ll present two such experiments conducted by Gneezy and Rustichini.
In one experiment, Gneezy and Rustichini followed the activities of a group of children who, as part of a compulsory high school project, went from house to house to collect donations for disadvantaged youths. The children were divided into two groups. Group A was the control group, in which the children were told, as is normally done, that the donations they collected would all go to a central charity fund to be disbursed to the needy. The children in Group B were told that they would each be paid 20 percent of the donations they succeeded in raising, in compensation for the time and effort they were putting in. Both groups set out simultaneously and returned at the same time.
The outcome was surprising but also logical and reasonable. The children who were offered compensation for their efforts ended up on average raising significantly less than the children in the control group. The monetary incentive lowered motivation, in contrast to the usual assumption that monetary incentives can only increase task motivation.
Many of us would probably have guessed correctly that this would be the outcome of the experiment. It tells us less about the actions of the children than about our intuitions regarding the relationship between mental compensation and material compensation. Once the children in Group B were told that they would be paid for their efforts, the mental compensation and satisfaction they received from the good deed of being involved in giving to the needy was irrevocably reduced. Instead of a volunteer effort for a cause, the task became a salaried job. And as a job, the pay was rather lousy for the amount of effort required. If it were offered to them from the start as a job, the children would probably have turned down both the work and the salary. Since they had no choice but to undertake it, they put in little effort with correspondingly dismal results.
My friend Dan Ariely once used the following analogy to describe the situation in which the children in Group B found themselves: at the end of a splendidly enjoyable evening at home with a pair of friends who were invited to dinner, just before the guests leave after the accepted goodnight handshakes and hugs, the wife hints something to her husband, who takes out his wallet, turns to you and asks: “I nearly forgot, how much do we owe you for the excellent dinner?”
Just as monetary incentives can reduce mental motivations for altruistic behavior, monetary fines imposed for selfish behavior can actually reduce the mental fine we would otherwise feel and thus induce us to act more selfishly. That was the subject of Gneezy and Rustichini’s second experiment, in which day care centers in the city of Haifa were asked to track the number of times per month that parents arrived late to pick up their children at the end of the day.
With that baseline data, the experimenters suggested imposing fines on late parents over a period of a month, to see how the fines would affect their behavior. The number of late arrivals, and their durations, of each parent over the month were totaled up to determine the fine to be charged, at a reasonable rate. The results of this second experiment were consistent with those of the first experiment. Imposing fines, rather than reducing lateness, actually increased it. Since they were now paying for the amount of time during which the children were in the day care center past closing time, parents regarded that time as akin to a “paid babysitting service.” That relieved them of the discomfort and shame they had previously felt when arriving late.
The insights gained from Gneezy and Rustichini’s experiments are very important for understanding the behaviors of organizations and private corporations. We only rarely use them, however, to create efficient incentives. At the individual level, in relationships between friends, there is usually a large emphasis on keeping track of favors (monetary or otherwise), with each individual striving to repay favors as soon as possible. In most cases this is not due to a pure-hearted motivation to be a giving person. Quite the opposite. In fact it is a selfish trait. Because favors are socially regarded as acts that should be mutually repaid, the benefactors of favors seek to reduce the “favor debts” that accrue as quickly as possible, even to the point of ruining the satisfaction the doer of the favor gets from the act of giving. When the needs of givers and receivers are consciously taken into account, the giving and accepting of favors between relatives and friends usually become much smoother and more stable.
When I was a child, my family would regularly have meals on holidays at my grandmother’s home in Jerusalem. My mother’s seven brothers and sisters, along with their families, would also attend. The central dish was always the traditional Jewish slowly simmered stew called cholent. Each of the sisters, including my mother, would pre-prepare a separate ingredient of the cholent. All the ingredients would then be placed into an immense pot, cooked, and served to the forty-plus guests in my grandmother’s one bedroom apartment.
Each sister habitually prepared twice as much as necessary. After we had stuffed ourselves to complete satiation, with the cholent only half-eaten, an argument would begin over how to divide the remaining half. Initially, each sister would go to great lengths to explain why she couldn’t possibly take home even a single spoonful: she’s on a diet, there is no room at all in the fridge at home, and so on. The most commonly repeated sentence at this stage was “with me it will end up in the garbage.”
Serious negotiations would begin in the second stage. “Matilda, that really isn’t nice of you. I took home all the leftovers last time. If you don’t take what I prepared this time, I won’t talk to you.” In the third stage, compromise would finally be attained: “All right, I’ll take some of this here if you take the rice and beans over there.”
We all loved the cholent—every bit of it and every ingredient that went into it. But the pleasure in eating the cholent was insignificant compared to the satisfaction we took from giving. We needed to give to such an extent that it was worth arguing over it. Sometimes arguments would last weeks, with each woman mentally remembering exactly which sister refused to take a particular leftover item a year earlier.
One time, the leftover division ceremony started off with the usual round of exclamations of “I simply can’t take home anything!” But Aunt Rachel uncharacteristically did not join in. Aunt Matilda, who noticed this immediately, was quick to try to make use of the unexpected opening. “Here, you really must have some of this,” she said to Rachel while pushing two overflowing bags of leftovers into her hands. Rachel grasped the bags and simply said, “Excellent, thank you very much.”
A stunned silence descended on the room. We all looked at Aunt Rachel as if she had possibly lost her mind. Aunt Dina worriedly inched closer to my mother and whispered in her ear that perhaps Uncle Moshe (Aunt Rachel’s husband) was experiencing financial difficulties in his carpentry shop. Their entire household must be scrimping every penny!
After Moshe had assured everyone in attendance that his carpentry shop was doing better than ever and that the household finances were as solid as a rock, thank you very much, it slowly dawned on the sisters that it was Rachel doing Matilda a favor by agreeing to take the leftovers home, not the other way round.
This changed everything. The family cholent gatherings became much calmer. Half of the food served still had to be divided at the end of every meal, but those divisions became much more equitable. Each sister was happy giving and also, sometimes, taking.
The point of the cholent story, of course, is that if giving is its own reward, then sometimes taking can be a favor. If my aunts had continued to negotiate purely in economic terms, each one should have been happy to take as much of the stew home as possible, and perhaps bickered over the last drops of it. By taking a sensitive, emotional approach, Aunt Rachel had short-circuited the whole problem, leading instead to a resolution that benefited everyone.